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2024 Supreme(Cal) 160

IN THE HIGH COURT AT CALCUTTA
PRASENJIT BISWAS, J.
M/s Fullerton India Credit Company Limited – Appellant
Versus
Ms. Manju Khati – Respondent
C.O. No. 3689 of 2015
Decided on : 02-04-2024

Advocates:
Advocate Appeared:
For the Appellant : Mr. Shaunak Mukherjee, Mr. Amitava Mitra, Ms. Antara Choudhury, Ms. Sanghamitra Majumder Mr. P. Sinha

IMPORTANT POINT
The main legal point established in the judgment is the mandatory requirement for the civil court to refer the parties to arbitration upon satisfaction of the prerequisites under Section 8 of the Arbitration and Conciliation Act.

Headnote:

Arbitration - Jurisdiction of Civil Court - Arbitration and Conciliation Act - Section 8, Section 5 - 4/4.1 - 8(1), 8(2), 8(3) - Sundaram Finance Limited Vs. T. Thankam (2015) 14 SCC 444 - Hema Khattar v. Shiv Khera (2017) 7 SCC 716 - Vidya Drolia v. Durga Trading Corpn. (2021) 2 SCC 1 - SBP & Co. v. Patel Engg. Ltd. (2005) 8 SCC 618 - M/s. Sundaram Finance Limited vs T. Thankam AIR 2015 Supreme Court 1303

Fact of the Case:

The defendant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 read with Section 5 of the Act of 1996 to refer the matter before the arbitrator. The Trial Court rejected the application, leading to the present revisional application.

Finding of the Court:

The Court found that the Trial Court failed to appreciate the arbitration clause and the mandatory requirements under the Act. It held that the Trial Court should have referred the matter to arbitration as per the provisions of the Act.

Issues: The issues revolved around the jurisdiction of the civil court to entertain the suit, the compliance with the arbitration agreement, and the proper interpretation of Section 8 and Section 5 of the Arbitration and Conciliation Act.

Ratio Decidendi: The Court emphasized that once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be to see whether its jurisdiction has been ousted, and not to see whether there is still jurisdiction in the civil court under the general law. It highlighted the prerequisites for an application under Section 8 and the need for the court to refer the parties to arbitration upon satisfaction of these conditions.

Final Decision: The order of the Trial Court was set aside, and the Trial Court was directed to refer the matter before the arbitrator within one month from the date of receipt of the order. The revisional application was allowed and disposed of with no order as to costs.

JUDGMENT :

Prasenjit Biswas, J.

1. This revisional application is directed against the order dated 7th July, 2015 passed by the learned Civil Judge (Junior Division), Siliguri in Title Suit No. 210 of 2013.

2. Being aggrieved and dissatisfied with the impugned order passed by the learned Trial Court, the present petitioner has filed this revisional application filed under Article 227 of the Constitution of India.

3. By passing the impugned order learned Trial Court rejected the application filed by the present petitioner/defendant filed under Section 8 of the Arbitration and Conciliation Act read with Section 5 of the Act of 1996.

4. The plaintiff/opposite party (herein) instituted a suit with a prayer for declaration, injunction and consequential relief against the present petitioner before the Trial Court which has been registered as Title Suit No. 210 of 2013. The plaintiff/opposite party also filed an application with a prayer for injunction filed under Order 39 rule 1 and 2 read with Section 151 of the Code of Civil Procedure. After receiving summons the present petitioner entered appearance in that suit and filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 read with Section 5 of the Act of 1996 with a prayer to refer the matter before the arbitrator to resolve the disputes cropped up in between them. The plaintiff/ opposite party filed written objection to the said application filed by the defendant/petitioner. The said application filed by the defendant was rejected by the Trial Court by passing an order dated June 10, 2014 and the said order passed by the Trial Court was challenged by the defendant before this Court by filing an application under Article 227 of the Constitution of India which was registered as C.O. No. 2550 of 2014. This said revisional application was allowed by this Court by passing an order dated August 26, 2014 by setting aside the impugned order dated June 10, 2014 passed by the learned Trial Court. This Court remanded the application filed by the defendant to the Trial Court with a direction to consider the same in accordance with law and dispose it within two months from the date of receive of copy of the order.

5. In pursuance of the said direction passed by this Court dated August 26, 2014 the application filed by the defendant under Section 8 read with Section 5 of the Arbitration and Conciliation Act a fresh order was passed on July 7, 2015 and by passing the said order learned Trial Court rejected the application filed by the defendant/petitioner (herein) on the grounds stated in the impugned order.

6. The order dated July 7, 2015 is under challenge in this revisional application which has been preferred by the defendant of the Title Suit No. 210 of 2013.

7. In pursuance of the direction passed by this Court service was affected upon the opposite party/plaintiff but she did not venture to appear and contest the present revisional application.

8. Learned Counsel appearing on behalf of the petitioner submits before this Court interalia that the learned Trial Court did not at all consider the statements made out in the application filed under Section 8 and 5 of the Arbitration and Conciliation Act, 1996. It is further submitted by the learned Counsel that when there is an agreement between the parties which contains an arbitration clause, the civil court has no jurisdiction to try the said suit and as such the learned Trial Court misrepresented the Section 8(1) and (2) of the Arbitration and Conciliation Act, 1996 at the time of passing of the impugned order.

9. Learned Counsel further assailed that the learned Trial Court has hopelessly failed to appreciate the fact that the present petitioner filed duly certified copy of the original agreement attested by the Notary Public, which is to be said duly certified copy of the original agreement in view of the legal proposition as settled by this Court. It is submitted by the learned Counsel that while passing the impugned or

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